Singapore Budget 2018 highlights!

2018 saw the advent of a strategic, progressive and a premeditated Singapore Budget!

The Singapore Budget 2018 focus on three primary issues that worry the economy of the country

  • A drastic change in the global economic weight, inclining towards Asia
  • Arrival and development of new technologies that are driven to change the economies and the people
  • Ageing

The Budget presented by the Minister for Finance, Mr. Heng Swee Keat Is inclined to overcome the struggles of the economy by strategically planning to curb down the negative effects of these shits. These innovations are focussed on making Singapore –

  • Economically vibrant and innovative
  • A smart city, dependable on green energy
  • A cohesive and a united society
  • A city with a sustainably secure future

Singapore Budget 2018 – A brief commentary

The Budget opened by the Honourable Minister of Finance Mr. Heng Swee Keat with an announcement about the budget surplus of S$9.6 billion, which far exceeds from the already forecasted budget surplus of S$1.9 billion.

Corporate Tax – Budget 2018

  • Enhancement in Corporate Tax rebate for the Assessment Year 2018 to 40% of tax payable. The same is capped at S$15,000. The rebate is extended to Assessment Year 2019 at 20% of tax payable, which is capped at S$10,000.
  • Adjustment of Start-up Tax Exemption Scheme (in or after Assessment Year 2020)
  1. 75% exemption on the initial S$100,000 of normal chargeable income
  2. 50% exemption on the next S$100,000 of normal chargeable income
  • Adjustment of Partial Tax Exemption (in or after Assessment Year 2020)
  1. 75% exemption on the initial S$10,000 of normal chargeable income
  2. 50% exemption on the next S$190,000 of normal chargeable income
  • 250% tax deduction is granted for qualifying the expenditure on research and development projects undertaken in Singapore
  • Granting 200% tax deductions for the initial S$100,000 for qualifying IP registration costs and IP licensing costs
  • Increase in expenditure capping for corporate claims with no requirements of prior approval from IE Singapore or the Tourism Board of Singapore to S$150,000 for every Assessment Year under the Double Tax Deduction for Internationalisation Scheme.
  • Extension of Business and Institutions of Public Characters Partnership Scheme and 250% tax deductions on qualifying donations to December 31st, 2021.
  • Extension of the Investment Allowance Scheme to also include qualifying incentives in the Submarine Cable Systems in Singapore
  • Enhancing certain initiatives to enhance the credibility and strength of the financial sector in Singapore –
  1. Extending Section 13X Enhanced-Tier Fund Scheme to all fund vehicles
  2. Introduction of a tax framework for Singapore Variable Capital Companies
  3. Extension of tax transparency treatment provided to Singapore listed Real Estate Investment Trusts to Singapore listed Real Estate Investment Trusts Exchange Traded Funds.
  4. Extension of Tax Incentives Schemes to December 31, 2023: QDS Approved Special Purpose Vehicles for securitisation of assets, incentives in financial sector, insurance sector business development and broking business. In addition – tax exemption for all primary dealers indulging in Government Securities in Singapore
  5. Extension of Section 14I tax deduction for all banks and qualifying financial companies to Assessment Year 2024 or Assessment Year 2025, depending on the financial year end of the concerned entity
  6. Rationalising tax exemptions withholding for the financial sector.

Goods and Services Tax – Budget 2018

  • Introduction of a reverse charge on all services imported by GST-exempt business entities and non-GST registered business entities w.e.f. January 1st, 2020.
  • Mandatory for overseas vendors providing digital services to register for GST w.e.f. January 1st, 2020, if global turnover exceed S$1 million every year and if their online sales to consumers in Singapore are more than S$100,000.
  • Increase in the rate of GST from 7% to 9% between 2021 and 2025.

Stamp Duty – Budget 2018

  • Increase in Stamp Duty rate from 3% to 4%, applied over the value of residential property over S$1 million.
  • Revised rates shall be applied to residential properties acquired on or after February 20th, 2018.
  • No changes in Buyer’s stamp duty rates for non-residential properties.

Business Support – Budget 2018

  • Wage Credit Scheme

Benefits under the scheme will be provided for three years (2018-2020). Government co-funding of the increase in wage will be  20% for year 2018, 15% for the year 2019, and 10% for the year 2020.

  • Grant for Productivity Solutions

Upto 70% fund support for adopting off-the-shelf and pre-scooped productivity enhancement solutions.

  • Enterprise Development Grant

Upto 70% fund support to firms trying to build their enterprises with innovative capabilities

  • ASEAN leadership programme

Providing assistance to business leaders in Singapore to understand the business environment and build more networks in their journey to expand to the Asian markets.

  • Tech Skills Accelerator

Providing assistance to entrepreneurs and innovators to develop more and more ICT professionals in various sectors in order to emerge the digital skills for artificial intelligence and data analytics